Louisiana companies often use mergers or acquisitions to rebound from serious financial problems — blending the companies’ multiplies resources, which, in turn, can often help get things back on track. It doesn’t always work out that way, however, as made evident by a recent situation involving Rosetta Genomics and another company. After a planned merger deal fell through, Rosetta filed for Chapter 7 bankruptcy.
The merger was planned to occur with Genoptix. The two companies had proposed an earlier merger that never got off the ground due to lack of shareholder support. However, a more recent proposal for $9 million garnered the approval needed to move forward. It first seemed as though everything was going according to plan.
Approximately three days after the deal was scheduled to close, Genoptix reported that Rosetta Genomics did not show evidence that it would complete the transaction. Rosetta told Genoptix that if the merger did not take place (meaning, if Rosetta failed to make good on the deal) it would claim bankruptcy. The next day, documents for Chapter 7 bankruptcy were filed in a U.S. Bankruptcy Court for the District of Delaware on behalf of Rosetta Genomics.
Companies filing Chapter 7 in Louisiana or elsewhere typically seek full liquidation of assets as a means to pay back debt. It may be possible to rebuild and start anew once a company’s credit rating has been restored, which generally takes several years. Questions regarding the Chapter 7 bankruptcy process may be addressed by an experienced debt relief attorney, who can also offer much needed counsel and support throughout any ensuring legal proceedings.
